With 13 Premier League titles and three Champions League trophies to its name, Manchester United remains one of the world’s richest clubs, with total revenue of £509m for the 2020 fiscal year. 

However, the failure to progress to the latter stages of the Champions League in recent years has impacted the club financially. The coronavirus has also taken its toll, plunging the club further into debt and forcing it, as well as many of Europe’s other top teams, to take a long hard look at their financial viability.

Manchester United Lost 23m in 2020

Over the last year, Manchester United’s revenues have fallen by 19% from £627m the year before, with the 76,000 capacity Old Trafford left empty for much of 2020 as a result of the ongoing COVID-19 containment measures. 

Executive vice chairman Ed Woodward said: “As we approach a full year since our last game with fans at Old Trafford, we reflect on an extraordinarily challenging 12 months for football and society as a whole.

That £118m worth of lost income consists of a £50.8m slump in commercial/retail revenue, a £17.6m fall in matchday revenue and television revenue that declined by £48m over the course of the year. That falling income has taken an inevitable toll on profits, with the club making a loss of £23m in 2020 compared with a profit of £18.9m the year before.    

In what has been a truly extraordinary year for sport, Manchester United hasn’t been the only major club in Europe to experience a year-on-year downturn in operating revenue. According to The European Champions Report 2021 from KPMG, the most successful club in the history of European football, Real Madrid, saw revenues fall by 8%, last year’s Champions League finalists Paris Saint Germain saw a 15% decline and AS Roma saw a dramatic drop in year-on-year revenues of 39%.

In fact, of the 20 teams sampled by KPMG, only Sevilla and Borussia Dortmund saw revenues increase last season. 

Net Debt Rises by £64m

Described by executive vice-chairman, Ed Woodward, as a “once-in-a-century level crisis”, Manchester United made the descion access a £60m draw-down of an available £200m credit line to cover soaring net debt levels resulting from the coronavirus pandemic.

Manchester United’s total net debt has grown to £455.5m, an increase of £64.2m compared to last year.  

With matches being played behind closed doors for most of the year, much of the increase in debt has been the result of lost matchday revenue. In the three months ending 31 December 2020, matchday revenue was just £1.5m, down from £32.7m during the same three months last year. That represents a 95.5% decline.  

The Fragility of Financial Sustainability in Football

COVID-19 has been financially distressing for just about all of the major clubs in Europe’s top leagues, but also for the football ecosystem as a whole. The crisis has highlighted long standing flaws in the finances of football clubs and exposed the fragility of the business model. Even before the COVID-19 outbreak, inflated player salaries and transfer fees were placing a significant strain on clubs’ finances. 

While many clubs tried desperately to reduce players’ wages in response to falling income streams and the absence of gate receipts, not all were successful. The ongoing commercial strength of Manchester United meant that it did not ask players to take a wage cut in response to the pandemic, although the players did voluntarily agree to give up 30% of their wages in April 2020 and donate the proceeds to their local NHS.

However, with player wages accounting for up to 85% of the revenue of some Premier League clubs in 2019, it’s not surprising that many teams did ask their playing staff to take a pay cut. Even top European clubs such as FC Bayern Munich and Juventus reduced the salaries of their playing staff, with staffing costs cut by 6% and 13% respectively.

Meanwhile, Real Madrid CF, which agreed a 10% temporary wage cut with its players until the end of the 2019/2020 season, saw its staffing costs increase by 4% due to new signings.

Manchester United is in an Enviable Position

Although the coronavirus pandemic has forced many clubs to deal with liquidity concerns due to the absence of gate receipts, the cancellation of media payments and the renegotiation of commercial agreements, Manchester United is still in a very enviable position. 

Despite the downturn, Manchester United remains a commercial powerhouse with the fourth-highest revenues in world football. That is why Edward Woodward and Manchester United’s chief financial officer, Cliff Baty, remain so bullish about the club’s prospects. Baty said: “We are well-positioned to weather the current uncertainty and are optimistic for the future”. 

Woodward added: “The rapid rollout of vaccines and falling rates of infections in the UK make us optimistic for a gradual reopening of sports stadiums with spectators beginning this spring. We’re hopeful of crowds ramping up to full capacity next season and are optimistic about the future on and off the pitch”.  


Graphic 1 – https://ir.manutd.com/~/media/Files/M/Manutd-IR/documents/2020-mu-plc-form-20-f.pdf

Graphic 2 – https://www.dailymail.co.uk/sport/football/article-8193655/Liverpool-furlough-debate-toxic-Premier-League-clubs-suffer-COVID-19.html

Graphic 3 – https://footballbenchmark.com/documents/files/public/The_European_Champions_Report_2021.pdf

Graphic 4 – https://www2.deloitte.com/uk/en/pages/sports-business-group/articles/annual-review-of-football-finance.html